A credit default swap pays a pre-agreed sum of money on a trigger (credit) event in return for defaulted debt of the reference entity. The CDS forms the core of the credit derivative business in terms of numbers of deals done.
First Concepts in Financial Engineering
A credit default swap pays a pre-agreed sum of money on a trigger (credit) event in return for defaulted debt of the reference entity. The CDS forms the core of the credit derivative business in terms of numbers of deals done.